Last week the South African Reserve Bank Quarterly Bulletin confirmed that foreign corporations are milking the economy, drawing away profits far faster than they are reinvested or than local firms bring home offsetting profits from abroad. Can anything be done to stop the hemorrhaging?

Hitting a 5% current account deficit is often a signal that speculative investors will start a currency run, as occurred even in strong East Asian exporters in 1998. Today only one other country (Colombia) among the 60 largest economies has a higher current account deficit.

Another destructive signal is foreign debt. Because repatriating profits must be done with hard currency (not rands), South Africa’s external debt has soared to about R2 trillion (39% of GDP, $125 billion), from less than R100 billion (16% of GDP, $25 billion) in 1994.

Desperate, such firms have been exporting profits ever more rapidly in comparison to overseas-generated profits that local corporations pay to local shareholders. (The ratio is about two to one.)

As a result, Moeletsi Mbeki once joked, “Big companies taking their capital out of South Africa are a bigger threat to economic freedom than [Economic Freedom Fighters leader] Julius Malema.”

Who let the capital out? African National Congress Secretary General Gwede Mantashe admitted last year: “At the time when neoliberalism was on the ascendancy as an ideology, it became fashionable to allow companies to migrate and list in the stock exchanges of developed economies.”

Exchange control liberalization began in 1995 with the Financial Rand’s abolition. The process sped up thanks to permission granted in 1999-2000 by Finance Minister Trevor Manuel and Reserve Bank Governor Tito Mboweni, allowing the country’s largest firms to delist from the Johannesburg Stock Exchange and thus shift profit and dividend flows abroad. (Manuel and Mboweni received accolades from world financiers and are today employees of Rothschild’s and Goldman Sachs, respectively.)

Exchange controls were relaxed on dozens of occasions since 1994. The 2015 concessions by Finance Minister Nhlanhla Nene – now employed by Allen Gray Investments after the BRICS New Development Bank Johannesburg branch manager job fell through – allow the wealthy to take R10 million ($650,000) offshore annually, a 2.5 times rise over prior years. Explained a Moneyweb reporter, this “effectively ended [individual] controls for all but the most wealthy South Africans.”

The corporate outflow is all the more frustrating because of a local capital strike. According to the Reserve Bank, corporate fixed investment is down nearly 7% in recent months, at a time government investment is also down 12%. (This trend isn’t peculiar to South Africa, for according to the United Nations, in 2011, $224 billion in Foreign Direct Investments were made in the extractive industries, and in 2015 just $66 billion.)

The only major new South African fixed investment comes from parastatals: Eskom’s over-priced and ecologically destructive Medupi and Kusile coal-fired power plants. Even more destructive Transnet projects lie ahead: the export of 18 billion tonnes of coal through a new rail line and the 8-fold increase in the South Durban port-petrochemical capacity (the National Development Plan’s top two infrastructure priorities), together representing the over-breeding of gigantic white elephants in President Jacob Zuma’s home province.

But even worse, some of the same firms removed an additional R330 billion offshore annually as ‘illicit financial flows’ through tax-dodging techniques from 2004-13, according to the Washington NGO Global Financial Integrity. These outflows exceed $80 billion annually across the continent, reports Thabo Mbeki’s African Union commission, throwing into question the merits of Foreign Direct Investment, given the scale of this looting.

Several spectacular local cases have been documented in recent years: misinvoicing by the biggest platinum companies, especially Lonmin with its Bermuda ‘marketing’ arm (and 9% ownership by Cyril Ramaphosa); De Beers with its R45 billion in misinvoicing over seven years; and MTN (under Chairman Ramaphosa) Mauritius profit diversions from several African countries.

Information from the Panama Papers recently revealed how Fidentia fraudster J. Arthur Brown and Foxwhelp’s Khulubuse Zuma (the president’s nephew) set up profit hideouts offshore, along with 1700 other South Africans. Last year, WikiLeaks whistle-blew R200 million in the Swiss HSBC accounts of Fana Hlongwane, the British Aerospace agent and arms-dealing advisor to then Defence Minister Joe Modise.

How common is such behavior? Laments local NGO Corruption Watch, “Two years ago PricewaterhouseCoopers revealed in their 2014 Global Economic Crime Survey that 69% of [SA] respondents indicating they had experienced some form of economic crime in the 24 months preceding the survey.”

In its 2016 Survey, PwC once again recorded a world-leading 69% corporate corruption rate for South Africa, compared to a global average for economic crime of 36%. According to the firm’s forensic services chief Louis Strydom, “We are faced with the stark reality that economic crime is at a pandemic level in South Africa.”

Notwithstanding a recent get-tough SA Revenue Service announcement following the Panama Papers’ jolt, the authorities’ inability to uncover such crime, prosecute it and put criminals into jail is no secret. More than two thirds of PwC’s 232 South African respondents believe Pretoria lacks the regulatory will or capacity to halt Sandton criminals.

The only short-term solution is a radical tightening of exchange controls against corporations and wealthy individuals, much as John Maynard Keynes advised more than 80 years ago: “The whole management of the domestic economy depends upon being free to have the appropriate interest rate without reference to the rates prevailing in the rest of the world. Capital controls is a corollary to this.”

However, last week’s news of the extremely adverse balance of payments may force the issue before long, unless the corporates and ratings agencies continue wielding their destructive power over the supine South African state.

professor at the University of KwaZulu-Natal, South Africa, where he has directed the Centre for Civil Society since 2004. His research interests include political economy, environment, social policy, and geopolitics.